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NEW TURKISH COMMERCIAL CODE, 6102

NEW TURKISH COMMERCIAL CODE, 6102. Auditing System.

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NEW TURKISH COMMERCIAL CODE, 6102

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  1. NEW TURKISH COMMERCIAL CODE, 6102

  2. AuditingSystem An internal auditing system is provided in the TCC. The NTCC replaces the internal auditing system with the external auditing system. Hence, the independent audit mechanism, which is conducted by independent audit firms or by sworn financial advisers or independent accounting financial advisers will become compulsory with the NTCC. The audit of financial statements and the annual report will be performed by such independent auditors in compliance with Turkish Accounting Standards.

  3. AnnualReports Annual reports are prepared within the first three month following the year end by the BoD. It is prepared to provide information on the details of the development of the company and the possible risks. In addition, wages, bonuses and premiums given to the board members, expenses, other payments and significant events following the year must be stated in the report. The compulsory minimum contents of the annual report are determined and announced in detail by the Ministry of Science, Industry and Technology with a specific communiqué.

  4. The Concept of Group Companies The concept of group companies has been regulated in Turkish legislation for the first time. If a parent company and its subsidiaries are subject to the same principles, they can be gathered under the same management, according to the NTCC. The NTCC provides transparency and balance between the shareholders, creditors and the executives of the subsidiaries. The NTCC regulates that, a Turkish or foreign commercial company, a real person, a legal entity such as foundations or unions, an unincorporated community such as community of heirs may become the parent company.

  5. Legal Framework of Banking Law

  6. Banking Act • Number of Act : 5411 • Acceptancedate : 19/10/2005 • OfficialGazette : Date: 1/11/2005 Number : 25983 (Mük.)

  7. The aim of this Act is to regulate procedure and principles related to providing trust and fair balance in financial markets and to protect rights and interests of investors and efficient operation of credir system.

  8. Banking Law - An Independent Branch • Banking law, in its broadest sense, regulates the corporate structure of banks, internal audit mechanism, independent external audit and the relations of banks with third parties. Banking law, in its limited sense, is related to banking contracts.

  9. Banks are commercial enterprises which are established by an authorized public authority. These enterprises can only enter into transactions which are regulated in banking code art. 4 called banking transactions. And only banks can make these transactions. So we can say, banks have limited sole trade (monopoly) authorization. This authorization gives the bank public character but does not make this institutions public law legal persons.

  10. Banking law is a branch of public law. But there are some transactions which are subject to private law such as banking contracts, guarentees of credit (bail, mortgage...), check, letter of credit....

  11. International Law • In ınternational law, there is no multilateral international convention relating to supervision and the integrity of banking law, except for some standarts such as IFRS (International Financial Reporting Standarts), ISA (International Standart on Auditing), Basel I and Basel II....

  12. Basel Standarts • These standarts are created by representatives of countries including the representatives of USA, Canada and Japan. • Basel comitee is a special comitee. This comitee is established in 1974 by the presidents of central banks of countries of G-10. The rules are based on risk and risk management.

  13. These standarts are accepted by many countries and become one of the core tools of banking regulation and supervision. For this reason, it is accepted that these standarts have an international character.

  14. BASEL I : is based on capital accord. The important function is providing the standarts of sufficiency of capital in international banking. • BASEL II : is based on the discipline of market. In the terms of bank, it means to be able to confide (trust) banks.

  15. Turkish Banking Code contain provisions which are consistent with Basel I and Basel II. Such as art. 29 (internal system, internal risk management and internal audit system), art.33 (independent audit firms), art.48 (loans) regulations about risk group.

  16. In European Community, there are many directives about banking sector and these are ever changing.

  17. National Sources of Banking Law • Main codes • The Code of Central Bank of Republic of Turkey (number 1211, 1970) • Banking Code (number 5411, 2005) Other related codes Turkish CommercialCode, 6762 (6102, 01.07.2012) Capital Market Code Code of Obligations Leasing Code...

  18. Other sources • 1. Comminiques and decisions of administrative authorities which are ever changing (for example, factoring, leasing, checks, free region zones...) • 2. CommercialCustomary Rules are also applied in banking law. Customary rules are objective rules of law.

  19. If there is no written rule about the case, judge decides according tocommercialcustomary rules. • To be able to decide according to these rules, such rules must be accepted as a customary rule. The duty of determination is given to chamber of commerces and industries.

  20. 3. General transaction clauses of banks • 4. Court Decisions and Doctrine

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